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Brazilian electric power sector: morbid obesity

image credit: Rafael Herzberg
Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Mar 17, 2021
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Brazilian electric power sector: morbid obesity

Industrial clients, multinational companies, for whom I consulted, point to a sad reality: Brazilian plants pay for electric energy, in USD/MWh, among the highest values ​​in their corporate ranking.

This is a situation that has been going on for a long time! And where is the "catch"?

This question that I am asked arises because our power matrix is ​​predominantly renewable and therefore associated with a very competitive "intrinsic" cost.

The answer I present points to a list of costs that are included without ceremony, which represent a large contribution of "fats" that would need to be "burned".

1. Unparalleled federal and state taxes
2. The cost of power theft that reaches more than 10%
3. The absence of demand response programs
4. Undersized reservoirs to mitigate fluctuations in hydrology
5. Expensive thermal plants dispatched in "dry" periods
6. State-controlled energy companies: in super fragile economic and financial situation
7. Transfer of the costs of the "duck curve" to "other" consumers
8. Subsidies that are paid by all "other" consumers
9. Official institutions (ONS, EPE, ANEEL, CCEE, etc.) do not have an agenda to turn around this situation
10. The electricity sector has historically been led by ministers involved in corruption scandals

The first step to turn around is recognizing our situation.

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Thank Rafael for the Post!
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